The Partnership for Information Sharing – the new EU way to keep up with money launderers and terrorism funders (part 3)

The AMLAR Surprise

It could seem that all what we need to know about PFIS has been included in the AMLR (as presented and briefly discussed in parts 1 and 2 of this subseries of the Bulletin). However, it is not exactly the case. We need to turn towards AMLAR to get the full picture.

Here (in AMLAR), in the recital 80, we can read, that “it should be possible for the AMLA to set up a PFIS in order to pursue” certain - very interesting – goal. What goal? This goal is to materialize the “AMLA’s mandate in preventing and detecting money laundering, its predicate offences and terrorist financing”. Luckily, it is ‘just a recital’, because although I have no doubt AMLA’s mandate is “preventing money laundering, its predicate offences and terrorist financing”, then I have huge doubts AMLA’s mandate covers “detecting money laundering, its predicate offences and terrorist financing”. Why? Because AMLA is neither a law enforcement agency nor a FIU.

Nevertheless, still “it should be possible for the AMLA to set up a PFIS”, yet there are strict limitations set on the use of such PFIS, since the “information exchanged within the scope of a partnership for information sharing should be consistent with the scope of the Authority’s mandate”. And here, ‘consistency’ is not a logical feature. It shall be understood as the purposive limitation: the information exchanged within PFIS set up by AMLA shall always fulfil the condition of being usable for the performance of any of AMLA’s tasks.

The Authorities As Initiators - The Announcement

However, it is further explained, that “where AMLA would act as direct supervisor of selected obliged entities or in support to FIUs which are part of a PFIS in any Member State, it could be beneficial for AMLA to also participate therein, under the conditions determined by the relevant national public authority or authorities that set up such partnership for information sharing and with their express agreement”.

So, AMLA may participate not only in PFIS which it sets up itself but – as we already know from the very definition of PFIS in AMLR - also in other PFIS the conditions of which “are determined by the relevant national public authority or authorities that set up such PFIS”. I have deliberately repeated this phrase, since it suggests that PFIS shall rather be set up (in the sense of the initiative for PFIS formation) by respective authorities than obliged entities itself or at least PFIS’ conditions shall be determined by the relevant national public authority. ‘Pointing the finger’ at the authorities as having the initiative for PFIS formation, seems an extremely valuable suggestion here.

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The Article 93 of AMLAR - The "Very Special PFIS"

However, we have not yet reached the proper article of AMLAR which fulfils the promise or the introduction of the recital 80. And this is art. 93 of AMLAR which is entitled “Partnerships for information sharing in the field of AML/CFT” (as if we could be saying – here, in AMLAR - about partnerships for information sharing in the fields of… fashion or… weather or… e.g. rugby).

The art. 93 (1) says that:

• “AMLA may set up cross-border PFIS” but definitely… “in accordance with fundamental rights and judicial procedural safeguards” or
• AMLA may “participate in PFISes established in one or across several Member States”

however, there are two conditions which must be fulfilled:

• this set up or participation must be “relevant for the fulfilment of AMLA’s tasks referred to in Chapter II” of AMLAR and
• this set up or participation must be performed “with the objective of supporting the prevention and combating of money laundering, its predicate offences and terrorist financing”.

This is my preferred reading of this paragraph, but it could also be so read that it is the set up of the PFIS by AMLA which shall be relevant for the fulfilment of AMLA’s own tasks, whereas the participation in the other PFISes shall be performed with the objective of supporting the prevention and combating of ML, its predicate offences and TF (since here AMLA would rather support NCAs and FIUs).

Both readings shall not be inconsistent with each other (materially, if not quite logically) in any important respect, in my humble opinion.

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The Authorities As Initiators - The Confirmation

Finally, where AMLA would like to participate “in an already existing PFIS” it shall be subject “to the agreement of the authorities that have established such a PFIS”.

Again, it seems there is a strong suggestion that there are authorities, not just the obliged entities themselves, which should be the ‘spiritus movens’ of establishing PFISes, although, it could also mean that AMLA shall participate in these PFISes only, which had been established by the authorities (not by obliged entities themselves). Yet, it seems quite unlikely to divide PFISes into such two distinct categories and as if PFISes established by the obliged entities would be somehow “unworthy” of AMLA’s participation. So we shall rather conclude that it is the authorities’ duty to establish PFISes (to be at least initiators of the PFISes, if not also the determinants of PFIS' conditions).

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The art. 93 (2) is more particular as it formulates the ‘framework’ and conditions of the PFIS formed by AMLA itself. In such PFIS (AMLA formed), which - as is being said – shall be of a “cross-border” nature (what seems quite natural considering the very concept of AMLA) “AMLA shall ensure that the PFIS complies with the requirements of Article 75(3), (4) and (5) of AMLR”.

The Very Special Exceptions

Moreover, “in addition to obliged entities, AMLA may invite the competent authorities referred to in Article 2(1), point (44), points (a), (b) and (c), of AMLR”…, “as well as Union bodies, offices and agencies which have a role in the prevention and combating of money laundering, its predicate offences and terrorist financing, to take part in the PFIS, where such participation is relevant for the fulfilment of their tasks and powers. Upon the unanimous consent of the participating members, other third parties may be invited to participate, on an occasional basis, in meetings of the PFIS, where relevant”.

This provision seems to formulate a list of very unique, if not mysterious, exceptions. AMLA may therefore invite, to this and only this unique PFIS (the AMLA formed one):

• “Union bodies, offices and agencies which have a role in the prevention and combating of money laundering, its predicate offences and terrorist financing, to take part in the PFIS”, where… “such participation is relevant for the fulfilment of THEIR (emphasis mine – G.H.) tasks and powers”

and

• “other third parties may be invited to participate, on an occasional basis”, but only in the “meetings of the partnership”, only “where relevant” and “upon the unanimous consent of the participating members”.

What kind of “Union bodies, offices and agencies” these may be? OLAF? No doubt if you ask me. Any other offices? EPPO? I would consider it evident faced with such general formulation.

BTW, the list of predicate offences themselves is long and any Union body, office or agency which “has a role” (nice formulation, isn’t it? Do you remember the undeniable “role” of the butterfly in the events of the universe – the so called ‘butterfly effect’?) in preventing or combating ANY of the ML or TF predicate offences, assuming “such participation is relevant for the fulfilment of THEIR (emphasis mine – G.H.) tasks and powers”… WHATEVER THEY MAY BE... This formulation sounds like a masterpiece of concept-stretching…

The participation of the “other third parties” (why not of you, Dear Reader, since you fulfil this all-encompassing definition well enough? And there may be plenty of reasons why your participation in this PFIS meeting could be relevant) seems less doubtful, since it refers to the “meetings” of the PFIS, not the very exchange of information within PFIS and it requires “the unanimous consent of the participating members”.

Notwithstanding the critical tone of my reading, I consider this last provision as not only non-risky but potentially helpful, since meeting various experts, be it e.g. AML/CFT experts, including the experts providing the very technical platform for PFIS, may only be beneficial.

I have more doubts regarding the previous provision allowing “Union bodies, offices and agencies” which may participate in the PFIS (so, potentially, in the very exchange of information itself?) FOR THE FULFILMENT OF THEIR OWN TASKS AND POWERS. I simply do not know where this leads us... Does it lead us in some well-defined direction?

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to be continued...

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23 October 2024

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The above publication contains its author’s private opinions only.